Superman IV: The Quest for Peace was released in 1987. After Superman III, Reeve vowed that he was done with Superman. However, he agreed to continue the role in a fourth film on the condition that he would have partial creative control over the script. The nuclear disarmament plot was his idea. Cannon Films purchased the production rights to the character of Superman from Alexander Salkind and his son Ilya Salkind, the original producers of the film series, in the mid-1980s. Cannon Films were known for low-budget, poorly-acted, poorly-scripted action films. They cut the budget of Superman IV in half to $17 million. The film was both a critical failure and a box-office disappointment, becoming the lowest-grossing Superman film to date. Reeve later said, "the less said about Superman IV the better." Both of Reeve's children from his relationship with Gae Exton had uncredited appearances in a deleted scene in which Superman rescues a girl, played by his daughter Alexandra, and reunites her with her brother, played by his son Matthew, after Nuclear Man creates a tornado in Smallville.
After the filming of Superman IV in February 1987, Reeve and Exton separated and Reeve returned to New York. In a depression without his children, aged seven and three, he decided that doing a comedy might be good for him. He was given a lead in Switching Channels. Burt Reynolds and Kathleen Turner had a feud during filming, which made the time even more unbearable for Reeve. Reeve later stated that he made a fool of himself in the film and that most of his time was spent refereeing between Reynolds and Turner. The film did poorly, and Reeve believed that it marked the end of his movie star career. He spent the next years mostly doing plays. He auditioned for the Richard Gere role in Pretty Woman but walked out on the audition because they had a half-hearted casting director fill in for Julia Roberts.
In late 1987, in Santiago, Chile, the country's dictator, Augusto Pinochet, threatened to execute 77 actors. Ariel Dorfman asked Reeve to help save their lives. Reeve flew to Chile and helped lead a protest march. A cartoon then ran in a newspaper showing him carrying Pinochet by the collar with the caption, "Where will you take him, Superman?" For his heroics, he was awarded the Grand Cross of the Bernardo O'Higgins Order, the highest Chilean distinction for foreigners. He also received an Obie Award and the Annual Walter Brielh Human Rights Foundation award.